RS2 seeks US, Asian clients

RS2 Software plc, the card management system provider, is focusing on growing its client base in the US and Asia while consolidating its European portfolio, chief executive officer Mario Schembri told The Sunday Times.

Meanwhile, the Sliema-based company, whose Bankworks suite of application modules is in use by more than 400 banks worldwide, is on track with plans to move into its custom-built €6 million headquarters in Mosta in the third quarter of next year.

“We have engaged a major UK marketing company to handle all communication with existing and potential clients in Europe and Asia,” Mr Schembri explained.

“We have also engaged a consultant specialising in the Asian market to work with our office in the Philippines. A year’s work has now produced our first Asian contract; the client will go live just after the end of the year.”

The chief executive added the Philippines office, which opened in Tigbauan, Illoilo, in April last year, has a team of 25 and has benefitted from considerable investment in marketing.

The office is being overseen by RS2 chairman Reinhold Schäffter, who spends extensive periods in the region with his family.

Mr Schembri admitted doing business in Asia was a learning process and RS2 was fully engaged in adapting its product to incorporate protocols and software that are not required in Europe.

Contacts made through RS2’s US subsidiary Transworks have resulted in two major regional contracts over the past few months. RS2 believes there is considerable potential for additional business in the US. The company is directing significant resources into developing Bank­works’ attractiveness to American clients to tap significant business opportunities.

Mr Schembri pointed out that the American industry differed from that in other regions because rather than being dominated by banks, private entrepreneurs and independent sales organisations are very active in the market, complimenting the banks in the free market through their actions.

“2011 and 2012 will see a consolidation of our business,” Mr Schembri added. “We now have clients in 28 countries in all regions, each providing services to their own institutional customers; that is a significant achievement for a Maltese company.

“Bankworks is a hugely competitive product, able to handle seven million transactions an hour. Our consolidation efforts also include marketing to the investing community in Malta and potential clients overseas.”

RS2 plc, which listed on the Malta Stock Exchange in 2008, recently announced post-tax profits just shy of €3 million, up 165 per cent on 2009.

Total revenue grew by 27.4 per cent to €7.5 million, and was positively impacted by a doubling in licensing fee income. Services to clients increased by 18 per cent despite expectations that budgets would be scaled back in the international economic climate.

Mr Schembri explained that major contracts signed since last year will be fulfilled by the first quarter of next year. His recent claims that lower service requests witnessed in 2009 did not represent lost business but rather postponed business has been vindicated.

He explained that all RS2’s clients were service providers or banks that had contracts with Visa and Mastercard and required constant updates to their card management systems. Up to €1.5 million was generated annually through maintenance alone, representing healthy levels of recurrent revenues. Renewal rates of comprehensive three- to five-year packages are also satisfactory.

“What distinguishes RS2 from other companies is that we have a product, developed over the past 25 years, and not just a service. No bank in the world can grow its client base without a card proposition,” Mr Schembri pointed out.

“Bankworks grows every year with constant research and development that is entrusted to a team of 40 developers led by our chief technology officer. New clients from Greece, the US, Germany bring their particular flavour to their requirements in the card business. All those requirements are incorporated into the product.”

The consistent growth in demand for Bankworks is the main reason RS2’s new headquarters in Mosta is crucial to the company’s future.

Sitting on 5,700 square metres of land facing the Mosta valley, the new block will boast two floors of 900 square metres each and a basement level of 1,000 square metres. RS2 will move in with its current 85-strong team and the building will be able to accommodate around 200 people.

The additional space will allow RS2 to develop its service provision and training functions.

Two people within the current team have been identified to lead the planned academy which will run training programmes for employees and clients’ own staff.

RS2 trainers currently travel to lead programmes for customers around the world.

The new premises will incorporate classrooms within two halls that can be divided into five spaces. The halls will also host major events like annual general meetings and RS2’s biennial forum for its international clients.

The third forum will be held to coincide with the premises’ official opening next year.